Tax Group Client Alert: Potential Two Year PTC Extension

December 8, 2015 Tax Group Client Alert: Potential Two Year CONTACTS PTC Extension Mark Regante Partner +1-212-530-5236 On December 7, the House Ways and Means Committee Chair, Kevin Brady, [email protected] circulated draft legislation that would extend the Internal Revenue Code Section 45 tax credit for electricity produced by certain renewable sources (“PTCs”) for two Michael Duff Partner years, making projects for which construction commenced prior to 2017 eligible for +1-213-892-4455 PTCs. As under current law, owners of such qualifying projects may elect a thirty [email protected] percent investment tax credit in lieu of PTCs. The amendment does not extend the Drew Batkin investment tax credit under Internal Revenue Code Section 48 for solar facilities. That Special Counsel credit, which is currently a thirty percent credit, becomes a ten percent credit for +1-212-530-5122 [email protected] solar facilities placed in service after December 31, 2016.

Mox Elraheb Associate This two year PTC extension is included as part of a much broader package extending +1- 213-892-4607 expired or expiring tax provisions. The draft legislation is a fallback position for [email protected] Congressional Republicans who have publicly expressed an intention to make permanent some tax extenders – specifically focusing on the research and expenditures credit. That longer term extenders package was rumored to include provisions for tapering off PTCs over a 4 or 5 year period. However, because Republican Congressional leaders are unsure that they can garner sufficient bipartisan support to pass the permanent extenders bill, they have indicated a willingness to consider this shorter-term package that includes, among other things, a two year extension of PTCs and a one year extension of bonus first year deprecation. Speaker of the House, Paul Ryan, indicated support for the two-year extenders package if the permanent extenders bill cannot be passed.

Milbank.com 1 TAX GROUP NEW YORK 28 Liberty Street, New York, NY 10005 Please feel free to discuss any aspects of this Client Alert with Russell Kestenbaum [email protected] +1-212-530-5790 your regular Milbank contacts or any of the members of our Tax Group. Joel Krasnow [email protected] +1-212-530-5681

If you would like copies of our Mark Regante [email protected] +1-212-530-5236 other Client Alerts, please visit our website at www.milbank.com Manan (Mike) Shah [email protected] +1-212-530-5501 and choose “Client Alerts” under “News.” Andrew Walker [email protected] +1-212-530-5624 This Client Alert is a source of general information for clients and friends of Milbank, Tweed, LOS ANGELES Hadley & McCloy LLP. Its content 601 South Figueroa Street, 30th Floor Los Angeles, CA 90017 should not be construed as legal advice, and readers should not Leah Karlov [email protected] +1-213-892-4522 act upon the information in this Client Alert without consulting Michael Duff [email protected] +1-213-892-4455 counsel.

Dr. Thomas Kleinheisterkamp [email protected] +49-89-25559-3676

Dr. Matthias Schell [email protected] +49-89-25559-3676

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Russell Jacobs [email protected] +44-20-7615-3009

MILBANK CLIENT ALERT: Tax Group, December 8, 2015 2